How much of your IT development budget are you wasting?

If you knew that you were wasting 15% of your IT development budget, how much effort would you put into solving the problem? I’m guessing you’d move mountains to eradicate that level of waste in your organisation, right?

Recently, I was reading Capgemini’s 2017 World Quality Report, which highlights the levels of wasted money in the innovation process. I wanted to share the results as I think the findings are fascinating, and of critical value to anyone involved in developing new technology.

The authors researched the views of 1600 executives involved in IT across the globe. They provide a comprehensive overview of the key trends in quality assurance (QA) and IT testing. Although the executives are spread across different industries, the results mirror our experience of banks and payment companies around the world. Let’s look at some numbers…

How much is spent on testing technology?

According to Capgemini, QA and test budgets have grown steadily every year since 2012. On average, the industry is spending 31% of its IT budgets on testing and they predict that this will rise to 40% over the next two years. Capgemini believes a reasonable level should be 25%. I believe it should be lower still, certainly south of 20% for anyone testing payment technology.

We see this issue in payment companies year after year and it is an easy problem to fix. But what is behind this inflated cost? According to CapGemini, test automation is a vital contributor to testing efficiency, yet this year’s study participants claim just 29% of testing activities are automated.

If I had been wearing false teeth when I read this they would have fallen out.

Here we have organisations investing in state-of-the-art technology. They want to improve efficiency and customer experience but with a process which doesn’t take advantage of the latest technology. It’s like trying to build the Burj Khalifa in Dubai with the 1902 methods of New York’s Flatiron building. The Flatiron is a beautiful piece of construction but techniques have evolved considerably.

What are the drivers of increased test budgets?

According to Capgemini there are several reasons for increasing test budgets. The top five are:

-          Increased amounts of developments and releases – 52%

-          A shift to Agile and DevOps causing more test iterations – 41%

-          Increased challenges with test environments – 36%

-          Businesses demanding higher quality IT – 33%

-          Detection of more defects which leads to more/longer test cycles – 31%

A fresh look at the testing process will undoubtedly reduce the drivers of excessive delivery costs. So much time is wasted in manual testing, as some people sit around while others wait for access to devices or schemes to complete their testing. It’s like watching an ATM queue on a busy Friday afternoon. 

Limited equipment means literally hours wasted by testers waiting for availability – and that ignores the time taken to re-set the hardware and software environments when eventually they do become available. Automation removes this waste as multiple teams around the world can test concurrently. With the shift to Agile and DevOps it’s not a case of whether we should move to automated testing, but when.

Throwing people at the problem

As testing becomes more complicated, one response is to throw more people on to test simulators. The law of diminishing returns governs manual software testing in the same way that it rules so many people-dependent functions.  F1 teams, faced with having to make faster cars, changed their shape, weight, balance and behaviour – they didn’t just add engines until they broke. Too often, adding people simply adds confusion, cost, inefficiency and management overheads, and rarely achieves the intended results.

What to do about it

My father once said to me…

“If you only have a minute to do something you still have 10 seconds to figure out how to do it better”

As the payments landscape gets more and more complicated I feel it is important to look at testing in a completely different way. The unnecessary cost generated by outdated test plans reduces your organisation’s ability to move forward in a rapidly changing environment, and is why we are challenging testing innovators to re-think their approach and take a fresh look at how they launch new initiatives.

I think that Capgemini’s report highlights perfectly why automation can help you to save vast amounts of money.